In an 8k filed yesterday, the company stated that the Chairman has been arrested, Jim Rogers resigns, and Chinese operations “appears to be abandoned”. From 8k:

Chairman Zhang Hongcheng has been detained and that an investigation regarding his conduct had proceeded to the second of three stages, in which the prosecutor determines whether to go forward with charges. The Board is informed that the potential charge against Chairman Zhang is illegally obtaining funds from the public.

Given the above, the Board has determined to request Chairman Zhang’s resignation as soon as communication with Chairman Zhang can be established.

As previously announced, the Company’s full Board became aware in late 2014 that one of the Company’s subsidiaries had entered into contracts to obtain license rights to film and television content at a total cost of RMB 525 million. To date, the Board has been unable to verify the authenticity of the contracts, the identity of the counterparties, or the goods or services received by the Company pursuant to the contracts.

The Company’s business in China appears to be abandoned, with retail stores closed and empty. Management has been unable to determine whether the Company’s wholesale business is operating.

On November 19, 2014, James Rodgers, Jr. informed the Company that the one-year contract pursuant to which he served on the Board expired in June 2014 and that since he had not renewed the contract; he was no longer a member of the Board as of June 2014. Mr. Rodgers served as Chair of the Compensation committee.

GeoInvesting is an investment research boutique in Skippack, Pennsylvania. The GeoTeam's focus is on providing high quality stock market research tools and in-depth due diligence on U.S. small and micro-cap equities and on Chinese companies trading in China and the U.S. We research long and short ideas, and are the leading research boutique charged with helping investors navigate the treacherous China equity universe with a paramount goal to protect portfolios from fraud. Numerous notable media outlets have credited GEO We have been credited with exposing numerous fraudulent companies in China. We have built a reputation in the US small and micro-cap space as champions of transparency.
On the long side, we have also developed a knack for picking stocks that have the propensity to get acquired at attractive premiums to their current prices.
Our team is currently comprised of 13 analysts and traders, and 7 on-the-ground researchers in Mainland China.

Find us on social media

Keep in touch with regular social updates

Armed with experienced analysts, a veteran investing team, and real time data from our fintech partner Sentieo, GeoInvesting gives you the power to consider educated investing decisions and identify risk.